CIOs think proliferation of IT applications is threatening competitive advantage

The tangled web of applications within international organizations is getting more and more complex, putting strain on the IT department and stunting digital transformation. This comes from a study of over 1,000 CIOs and senior IT decision makers by Capgemini, a provider of consulting, technology, and outsourcing services.

According to the report, released today, over the last three years the number of IT decision makers who believe their business has more applications than it needs has increased from just over a third (34 percent) to nearly half (48 percent). Just 37 percent believe the majority of their applications are mission critical. Nearly three quarters (70 percent) believe at least a fifth of their company’s applications share similar functionality and could be consolidated, and a further 53 percent believe a fifth should be retired or replaced.

Apps bloat is a huge problem. Especially when the apps are non-mission critical, or context rather than core applications. We may very well be at a tipping point, because new mobile apps and more use of SaaS and cloud apps forces a rethinking of an organization's entire applications strategy and approach. In order to modernize successfully, enterprises may need to first identify and cull out extraneous applications.

This isn’t just an IT problem, but a business problem. The study revealed that 60 percent of senior IT decision makers believe their department’s most valuable contribution to the company is introducing new technologies. A significant number have already implemented cloud computing (56 percent), mobility (54 percent), social (41 percent), and big data (34 percent) solutions.

However, without a modernized applications landscape, IT lacks the bandwidth to deliver competitive advantage through these technologies. Little wonder that 76 percent believe rationalization is important to realizing their company’s objectives.

“On the surface, a badly organized, overloaded and out-dated applications landscape sounds like a minor irritation for the IT team, absorbing bandwidth and wasting money, but ultimately not a problem that should keep the wider business up at night,” said Ron Tolido, CTO Application Services Continental Europe at Capgemini. “But in a world where all facets of an organization are starting to embrace digital transformation—and are dependent on the quick deployment of mobile, social, Big Data and Cloud solutions for competitive advantage—a well-rationalized applications landscape suddenly becomes a much bigger, strategic imperative for the whole company.”

The study also contains evidence that, while Western organizations are creaking under the strain of outdated, unused legacy applications, developing markets are benefiting from their relatively fresh, young IT landscape. Countries like Finland and Norway report below-average levels of understanding between business and IT (just 64 percent and 69 percent respectively believe the relationship is "satisfactory"), an encouraging 92 percent of respondents in Brazil, India, and China report a satisfactory understanding between the two. So supporting old legacy platforms only to keep older non-critical apps running has a multiplier downward effect on productivity and keeps costs artificially high.

The findings of Capgemini’s 2014 Application Landscape Report are based on a survey conducted in 12 languages with 1,116 CIOs and top-level IT decision makers in companies of various sizes from a wide range of industries. With a global emphasis, the report covers 16 countries, with 73 percent of respondents from developed economies (Australia, Europe, USA) and 27 percent from fast developing countries (Brazil, China, India).

The findings are also derived from work done by Capgemini’s Wide-angle Application Rationalization Program (WARP) CoE. WARP is Capgemini’s framework for application rationalization and IT transformation. The Center of Excellence for WARP, over the past 4 years, has catered to over 150 clients and analyzed more than 30,000 applications, thus providing key industry benchmarks for critical IT metrics.